Medicare Safety Net and Psychology: Smart Health Care Budgeting Guide

Medicare Safety Net and Psychology: Can your family save by having all members attend therapy this year?

The Medicare Safety Net is a scheme in Australia designed to provide financial assistance to individuals and families who have significant out-of-pocket medical expenses (therapy, surgeon bills, psychiatrists, GP visits etc). Its purpose is to alleviate the burden of high medical costs.

Yes, the greatest benefit in relation to the safety net for non-concession card holders is for 3 family members to each attend 10 sessions, for concession card holders it is of great benefit for 2 or more family members to attend 10 sessions in the same calendar year. All medical expenses contribute and benefit once the threshold is reached.

Why should families lump medical expenses together in the same year?

By combining their medical expenses within a single year, families can reach the Medicare Safety Net threshold more quickly, which triggers the higher Medicare benefits for all medicare rebateable services. This can be particularly advantageous for families with high medical costs or those with children who require frequent medical attention. For example, if a family has several members who need various medical services throughout the year, consolidating these expenses can help them reach the threshold sooner and receive increased benefits for the remainder of the year.

How to register for the Medicare Safety Net:

Individuals are automatically registered. Couples and families can register online through their myGov account, by calling the Medicare program, or by completing a registration form (MS016) available on the Services Australia website. By registering as a family, you ensure that all eligible medical expenses are counted towards reaching the Medicare Safety Net threshold.

The medicare safety net thresholds are available on the Services Australia website.

Example Scenario: concession card holders

If both individuals spend $190 per session, with a rebate of $93.35 per session and a threshold of $811.80, the calculations are as follows:

• Out-of-pocket per session: $190 – $93.35 = $96.65
• Out-of-pocket per person for 10 sessions: $96.65 * 10 = $966.50
• Combined out-of-pocket expenses: $966.50 * 2 = $1933.00
• Medicare Safety Net threshold: $811.80
• Amount exceeding the threshold: $1933.00 – $811.80 = $1121.20
• Reimbursement: $1121.20 * 80% = $896.96
• Final out-of-pocket expenses: $1933.00 – $896.96 = $1036.04

In this scenario, both individuals benefit from combining their expenses as they exceed the Medicare Safety Net threshold and receive a reimbursement of $896.96, significantly reducing their final out-of-pocket expenses. Three or more family members benefit also.

Example Scenario: three family members full fee and non-concession 

If three family members attend 10 psychology sessions each:

• Individual Expenses:
• 10 sessions * $141.65 per session = $1416.50 out-of-pocket per person
• Combined Family Expenses:
• 3 people * $1416.50 per person = $4249.50 total out-of-pocket
• Medicare Safety Net Benefit:
• The combined family expenses ($4249.50) significantly exceed the threshold ($2544.30), triggering the Safety Net benefit.
• 80% of the amount exceeding the threshold is reimbursed.
• Reimbursement: ($4249.50 – $2544.30) * 80% = $1364.16
• Final Out-of-Pocket Expenses: $4249.50 – $1364.16 = $2885.34

With three family members attending 10 sessions each, combining their expenses becomes even more advantageous. The family receives a substantial reimbursement of $1364.16 from the Medicare Safety Net, significantly reducing their final out-of-pocket costs.

Example Scenario: two family members full fee and non-concession 

In a scenario, where two family members attend 10 sessions, combining their expenses is still beneficial. By exceeding the Medicare Safety Net threshold, the family receives a reimbursement of $229.36, with a final out of pocket expense of $2603.64, reducing their final out-of-pocket expenses.

This information is provided for illustrative purposes only, is based on some of our fees for some clinicians at the time, is based on 2023 thresholds and cannot be relied upon as financial advice, please conduct your own independent financial analysis.